Obama Opens Window for Russians to Contest Magnitsky Sanctions

WASHINGTON, April 8 (By Carl Schreck for RIA Novosti) – Russian officials who are slapped with Magnitsky Act sanctions this week may have seen their dim prospects for recourse in US courts brighten thanks to US President Barack Obama.

In what the White House called a “routine delegation” of responsibilities, Obama on Friday formally tasked the US Treasury and State Departments with implementing key aspects of the Magnitsky Act, which introduces visa and financial sanctions on Russian officials suspected of human rights abuses.

But according to a Congressional memo obtained by RIA Novosti, the move also opens a window for Russian officials to challenge the sanctions as “arbitrary and capricious” under the US Administrative Procedure Act (APA), which applies to agencies like State and Treasury but not to the US president.

“If such a delegation was to occur and a court found that the acting agency’s determinations were reviewable, a reviewing court would evaluate the agency’s actions under the arbitrary and capricious test,” according to the Feb. 25 Congressional memo, which analyzes legal aspects of the Magnitsky Act.

Of course, getting a US court to review whether Washington was justified in placing Russian officials on the so-called “Magnitsky List”—which by law must be made public this week—is only half the battle in such cases, said Kevin Stack, an expert on presidential power at Vanderbilt Law School in Tennessee.

“My sense is that it would be possible to get review but very hard to actually obtain a reversal,” Stack told RIA Novosti on Monday.

The Magnitsky Act, which has incensed Moscow, was signed into law by Obama in December and is ostensibly designed to punish Russian officials believed to be connected to the death in a Moscow jail of whistleblowing lawyer Sergei Magnitsky in 2009.

The sanctions were later extended to include any Russian officials deemed by Washington to be complicit in human rights abuses.

Moscow has accused Washington of meddling in its internal affairs with the planned sanctions, responding in part by banning US adoptions of Russian children and promising its own blacklist of Americans.

Critics of the Magnitsky Act have also said it is at odds with the fundamentals of American jurisprudence, including the presumption of innocence and due process, because the allegations against the Russian officials are not being tested in a court of law.

The law tasks the White House with implementing key aspects of the sanctions, such as designating the Russian officials to be punished, submitting the names to the US Congress, and determining which sanctioned officials will have their status classified in the interest of US national security.

Obama’s directive on Friday put these and other aspects of the law in the hands of State and Treasury, a move that White House National Security Council spokeswoman Caitlin Hayden called a “routine delegation” of responsibilities “to the agencies most appropriate to handle them.”

The Obama administration had originally favored separating the Magnitsky Act from the landmark bill normalizing trade relations with Russian to which it was ultimately attached in what many saw as an attempt to minimize the impact on bilateral ties in areas of cooperation such as counterterrorism and arms control.

The White House memorandum delegating the implementation of the law mentioned neither Magnitsky nor Russia, identifying the law only by its formal name: Public Law 112-208.

Hayden, however, dismissed the suggestion that the directive was aimed at moving the White House from the focus of the anticipated angry response from the Kremlin.

“You should not read into it that we are trying to distance ourselves from implementing the law,” Hayden told RIA Novosti.

She said she had no comment on whether the delegation of responsibilities might open the way for legal challenges from the targeted Russian officials.

The most fertile ground for a Russian official to challenge the sanctions would probably concern the asset freeze aspect of the Magnitsky Act, which arguably could violate the US Constitution’s directive that no one should be “deprived of life, liberty, or property, without due process of law,” legal experts told RIA Novosti.

“An imaginative lawyer might come up with more than I can, but I think the argument would have to be constitutional, especially as to any asset freeze,” said Paul Stephan, a professor at the University of Virginia School of Law.

Such lawsuits could be filed in any US court, said Stephan and Stack.

“Unless otherwise specified in the underlying trade acts which [the Magnitsky Act] amends, the federal court in Washington, DC, is a good bet,” Stack said.

Exactly how successful individuals targeted by US sanctions have been in challenging their legal status in American courts remains unclear.

According to the Congressional memo obtained by RIA Novosti, the authors submitted a request to the Treasury Department’s Office of Foreign Assets Control (OFAC) asking for statistical information about the number of such challenges, successful and otherwise.

As of the memo’s publication, OFAC had not responded to the request, according to the authors.

Treasury Department spokesman John Sullivan, however, told RIA Novosti on Monday that no US court “that has reviewed an OFAC designation on its merits has overturned it.”

“OFAC designations rely on a wide range of information and are carefully reviewed for legal sufficiency before they are finalized,” Sullivan said.


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